Saudi Arabia’s 3Q 2020 Budget Deficit Shows Improvement Over Previous Quarter Amidst Higher Tax Revenue

Data from the Kingdom of Saudi Arabia’s (KSA) Ministry of Finance (MoF) revealed the third quarter 2020 (3Q 2020) budget deficit at SAR 40.768 billion, mainly due to a decline in oil revenue led by low oil prices and production cuts. However, the deficit had more than halved compared to the second quarter of 2020, due to an increase in overall government revenues.

Total government revenue was up 4.0% year-on-year (YoY) reaching SAR 215.6 billion in 3Q 2020, despite a 30.0% YoY decline in oil revenues during the same period. The main driver of government revenue was tax increases imposed by the KSA, which saw value-added-tax triple to 15% in July 2020, in a move to boost non-oil income to the country. Tax revenue wa...